Toro, Energy Rise as State Set to Allow Uranium Mines

By Jason Scott

Sept. 15 (Bloomberg) -- Toro Energy Ltd. and Energy & Minerals Australia Ltd. led gains in shares of Western Australian uranium explorers as the Liberal Party, which has indicated it will allow mining of the fuel in the state, won the right to govern.

Toro rose as much as 49 percent in Sydney trading, the most since March 2006, and was up 35 percent to 29 Australian cents at 11:46 a.m. Energy & Minerals surged as much as 33 percent, the most in a week. Uranex NL gained 28 percent, the biggest jump since April 2006.

The Liberals want to open the state, which accounts for more than a third of the nation's exports, to uranium miners such as Cameco Corp., the world's biggest producer, and BHP Billiton Ltd. Western Australia has as much as 10 percent of the world's known uranium reserves, worth about A$40 billion ($32 billion), according to an estimate from the federal government last year.

``Projects are now going to be developed, which they couldn't before, and there will be a flurry of interest in the sector,'' said Gavin Wendt, senior resources analyst at Fat Prophets Funds Management in Sydney. ``Whilst they will be given the green light politically, they still have to be developed on sound economics.''

Mulga Rocks

The election result means Adelaide-based Toro will work on enhancing its Wiluna project, which includes the Lake Way and Centipede deposits east of Meekatharra, it said in a statement.

``We can now focus on enhancing the resource, environmental, economics, health and technical analysis of Wiluna to ensure its project economics provide the right value for the Company's shareholders and for potential development,'' Toro Energy Managing Director Greg Hall said in the statement today.

Perth-Based Energy & Minerals wants to mine uranium at its Mulga Rocks Deposits, 250 kilometers (155 miles) east-northeast of Kalgoorlie.

``Based on past exploration, which includes 1,600 drill holes, Mulga Rocks represents Australia's largest uranium deposit not controlled by either BHP Billiton Ltd. or Rio Tinto Group,'' Energy & Minerals said in a Sept. 12 statement.

Uranex, also based in the Western Australian capital, has deposits at Thatcher Soak, 130 kilometers northeast of Laverton.

Paladin Energy Ltd., a Perth-based producer of uranium in Africa, is also benefiting from the change of government in Western Australia, where it owns the Manyingee and Oobagooma uranium resource sites. Paladin rose as much as 7.4 percent and were trading 3.6 percent higher at A$4.89.

Cameco, BHP

Cameco, based in Saskatoon, Canada, agreed in July to buy a majority stake in the Kintyre exploration project in Western Australia from Rio Tinto Group for $346.5 million.

BHP's Yeelirrie resource and Toro Energy's project are probably the most advanced in the state, according to analyst John Wilson at Sydney-based Resource Capital Research Pty. Uranex and Energy & Minerals have earlier-stage projects, he said.

BHP rose as much as 2.8 percent and were trading 0.8 percent higher at A$36.28.

Crossland Uranium Mines Ltd. today said it will intensify exploration at its Crossland Creek site in Western Australia due to the election result.

``Crossland, with its Canadian-listed joint venture partner Pancontinental Uranium Corp., will be allocating additional resources to our Crossland Creek project in the West Kimberley region now that there will be a Western Australian government that says it will not impose a ban on uranium mining,'' Chief Executive Officer Geoff Eupene said in a statement today.

The Sydney-based company's shares rose 13 percent to 9 cents.

Liberal leader Colin Barnett will take over from Labor's Alan Carpenter as the state's new premier, ending a week of political gridlock after a Sept. 6 poll failed to produce a clear winner.

To contact the reporters on this story: Jason Scott in Perth at Jscott14@bloomberg.net;